Family Office Glossary
Clear definitions of the terms that shape modern family offices — from capital calls to consolidated reporting.
157 terms
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Accredited Investor
A regulatory status that permits individuals or entities to invest in private, unregistered offerings such as private equity funds, hedge funds, and private placements. Qualification is typically based on income or net worth thresholds, on the premise that wealthier investors can bear the risks of less-regulated markets. UHNW individuals and family offices generally qualify comfortably, and many also meet the higher 'qualified purchaser' standard.
Investments & MarketsAI in Wealth Management
The application of artificial intelligence to wealth operations, including extracting data from statements and capital call notices, flagging reconciliation anomalies, drafting report commentary, and answering natural-language questions about the portfolio. For lean family office teams, AI compresses hours of document handling into minutes. Its value depends entirely on clean, consolidated underlying data, reinforcing the case for a single source of truth.
Family Office Operations & TechnologyAlternative Investments
Asset classes outside traditional listed equities, bonds, and cash, including private equity, venture capital, private credit, hedge funds, real estate, infrastructure, and collectibles. Family offices allocate heavily to alternatives, drawn by return potential and their long-term investment horizon. Because alternatives lack daily pricing and standard statements, they demand specialised tracking and reporting.
Investments & MarketsAsset Allocation
The division of a portfolio across asset classes such as equities, fixed income, private markets, real estate, and cash. Allocation decisions drive the large majority of long-term portfolio returns and risk. Family offices monitor actual allocation against policy targets across all entities and custodians, which requires consolidated, up-to-date data.
Investments & MarketsAssets Under Administration (AUAdmin)
The total value of assets for which a firm provides administrative services, such as custody, reporting, bookkeeping, and safekeeping, without making investment decisions. The measure captures operational rather than advisory scale. For family offices evaluating service providers, it indicates experience in handling reporting and administration at volume.
Investments & MarketsAssets Under Advisement (AUA)
The total value of client assets on which a firm provides advice, including assets it does not directly manage or hold. AUA is broader than AUM and is often quoted by multi-family offices and consultants whose role is advisory rather than discretionary. When comparing providers, families should ask precisely what a quoted figure includes.
Investments & MarketsAssets Under Management (AUM)
The total market value of assets that a family office, wealth manager, or fund manages on behalf of its clients or family. AUM is a standard measure of scale and often determines fee levels, access to institutional products, and regulatory obligations. For family offices, consolidated AUM across all entities and custodians is the starting point for meaningful oversight.
Investments & MarketsAutomated Reconciliation
The systematic matching of transactions and positions in the family office's records against custodian and bank statements, performed by software rather than by hand. Reconciliation catches missing transactions, pricing errors, and fraud, and is the quality control that makes consolidated reports trustworthy. Automating it removes one of the most time-consuming manual tasks in family office operations.
Family Office Operations & TechnologyB
Bankable vs. Non-Bankable Assets
Bankable assets are securities and cash held with financial institutions and visible on custodial statements, while non-bankable assets include private equity, real estate, art, yachts, and operating businesses held outside the banking system. Non-bankable assets often represent well over half of UHNW wealth. Capturing both in one consolidated view is a defining requirement of family office reporting.
Family Office Operations & TechnologyBenchmark
A standard, usually a market index or blend of indices, against which portfolio performance is compared. Benchmarks reveal whether managers are adding value relative to what passive exposure would have delivered. Family offices typically set benchmarks per asset class and for the total portfolio in the investment policy statement.
Investments & MarketsBeneficiary
A person or entity entitled to receive benefits, such as income, capital, or discretionary distributions, from a trust, estate, insurance policy, or foundation. In family wealth structures, beneficiaries are usually family members across multiple generations. Understanding who benefits from which entity is essential for accurate consolidated reporting of family wealth.
Trusts & Estate PlanningC
Capital Account
An investor's individual ledger within a fund or partnership, recording contributions, allocated gains and losses, fees, and distributions. The capital account balance represents the investor's current stake and is the authoritative source for reconciling fund positions. Family office accounting systems mirror these accounts to keep entity-level books accurate.
Private Markets & FundsCapital Call
A demand from a private markets fund for investors to pay in a portion of their committed capital, usually to fund a new investment or fees. Calls arrive on short notice, typically ten business days, and missing one can trigger severe penalties. Family offices track expected calls closely to ensure cash is available without disturbing the portfolio.
Private Markets & FundsCapital Commitment
The total amount an investor contractually agrees to provide to a private markets fund over its investment period. The fund draws the commitment gradually through capital calls rather than collecting it upfront. Monitoring unfunded commitments across dozens of funds is critical for family office liquidity planning.
Private Markets & FundsCarried Interest
The share of a fund's profits, typically 20 percent above a hurdle rate, paid to the general partner as a performance incentive. Carry aligns the manager's rewards with investor outcomes but also shapes behaviour, which is why its structure receives close attention in fund terms. Understanding fees and carry is essential to comparing net returns across private markets investments.
Private Markets & FundsCharitable Remainder Trust (CRT)
An irrevocable trust that pays income to the grantor or other beneficiaries for a set term or lifetime, after which the remaining assets pass to charity. CRTs allow highly appreciated assets to be sold inside the trust without immediate capital gains tax, converting concentrated positions into diversified income streams. They combine income, tax, and philanthropic planning in a single vehicle.
Trusts & Estate PlanningChief Investment Officer (CIO)
The senior executive responsible for a family's investment strategy, including asset allocation, manager selection, risk oversight, and performance. In a single family office, the CIO translates the family's objectives and risk appetite into a working portfolio. Hiring a dedicated CIO is often the single largest staffing decision a family office makes, which is why many opt for the outsourced model instead.
Family Office Models & RolesCloud-Based Family Office Software
Family office platforms delivered over the internet and hosted on secure cloud infrastructure, rather than installed on local servers. Cloud delivery gives lean family office teams enterprise-grade capability with no IT department, automatic updates, and secure access from anywhere. Security certifications such as ISO 27001, encryption, and multi-factor authentication are the baseline expectations for handling family financial data.
Family Office Operations & TechnologyClub Deal
A direct investment made jointly by a small group of like-minded investors, often several family offices, who pool capital and share due diligence on a single opportunity. Club deals give families access to larger transactions than they could do alone, while avoiding fund fees and retaining influence over the deal. Trust among participants and clear governance of the vehicle are essential to making them work.
Private Markets & FundsCo-Investment
An investment made alongside a private equity fund or lead investor into a specific deal, usually on reduced or zero fees. Co-investments let families increase exposure to their highest-conviction opportunities while keeping costs down. They are among the most sought-after opportunities in family office networks.
Private Markets & FundsCodicil
A legal supplement that amends specific provisions of an existing will without rewriting the whole document. Codicils are commonly used for targeted changes, such as updating an executor or exercising a testamentary power of appointment. They must be executed with the same formalities as the will itself to be valid.
Trusts & Estate PlanningCollectibles
Tangible assets of passion and value, such as art, classic cars, fine wine, watches, and jewellery, held for enjoyment as well as potential appreciation. Collectibles are a meaningful slice of UHNW wealth but are illiquid, costly to insure and store, and hard to value. Including them in the family's consolidated net worth, with documentation and current valuations, is a mark of disciplined wealth administration.
Investments & MarketsConcentration Risk
The risk that arises when a large share of a family's wealth is tied to a single asset, company, sector, or currency, often the original family business. While concentration frequently created the wealth, it can also destroy it. Measuring true concentration requires looking through all entities and accounts to the underlying exposures.
Investments & MarketsConsolidated Reporting
The aggregation of all of a family's assets, liabilities, and performance, across every custodian, entity, currency, and asset class, into a single coherent set of reports. It answers the deceptively simple questions of what the family owns, what it is worth, and how it is performing. Consolidated reporting is the core deliverable of most family offices and the primary function of family office software.
Family Office Operations & TechnologyCost Basis (Tax Basis)
The original value of an asset for tax purposes, usually the purchase price adjusted for improvements, fees, and corporate actions. Cost basis determines the taxable gain or loss when an asset is sold, making accurate records essential for tax planning. Reconstructing basis across decades of holdings and multiple custodians is a common and painful family office task, and a strong argument for systematic record-keeping.
Tax & ComplianceCrummey Notice
A written notice informing trust beneficiaries of their temporary right, usually 30 days, to withdraw a recent gift contributed to the trust. The withdrawal right, rarely exercised in practice, is what qualifies the gift for the US annual gift tax exclusion. Issuing and archiving Crummey notices is a recurring administrative duty for trusts funded by annual gifting, such as insurance trusts.
Trusts & Estate PlanningCustodian
A financial institution, typically a bank, that holds securities and cash on behalf of investors for safekeeping. UHNW families commonly spread assets across several custodians for diversification and access to different capabilities. Aggregating positions and transactions from multiple custodians into a single view is one of the biggest operational challenges family offices face.
Family Office Operations & TechnologyD
Data Aggregation
The automated collection of positions, transactions, and valuations from banks, custodians, and fund managers into one system. Aggregation replaces the manual retyping of statements into spreadsheets, cutting errors and freeing staff for analysis. Automated feeds combined with support for manually tracked private assets form the data foundation of the modern family office.
Family Office Operations & TechnologyData Strategy
A family office's deliberate plan for how wealth data is collected, stored, secured, reconciled, and turned into reporting and decisions. It defines which system is the source of truth, how custodian feeds and manual entries flow in, who may access what, and how quality is controlled. As offices digitise, data strategy has become as important to wealth preservation as investment strategy.
Family Office Operations & TechnologyDeal Flow
The stream of investment opportunities presented to an investor, whether from bankers, fund managers, peer family offices, or the family's own network. The quality of a family office's direct investment programme depends heavily on the quality of its deal flow. Reputation, discretion, and speed of decision-making are what keep the best opportunities coming.
Private Markets & FundsDigital Family Office
A family office whose operations run primarily on integrated digital platforms rather than spreadsheets, paper, and email. Data flows automatically from custodians and managers into a single system, reports are generated on demand, and family members access their information through secure portals. The digital model reduces headcount needs, errors, and key-person risk simultaneously.
Family Office Models & RolesDirect Investment
An investment made straight into a company or asset rather than through a fund, giving the family full control over selection, terms, and exit. Family offices increasingly favour directs to reduce fees, apply their operating expertise, and align investments with family values. Directs demand strong internal capability in sourcing, due diligence, and monitoring.
Private Markets & FundsDirect Lending
The largest segment of private credit, in which funds or investors lend directly to companies, bypassing banks and public bond markets. Loans are typically senior, secured, and floating-rate, offering yield premiums over comparable public debt. Family offices access direct lending through funds or, increasingly, by participating directly in loans within their networks.
Private Markets & FundsDirect Listing
A route to the public markets in which a company lists existing shares on an exchange without raising new capital or using underwriters. Direct listings avoid dilution and underwriting fees and usually skip the traditional lock-up, giving existing holders immediate liquidity. They suit well-known companies whose shareholders, including founders and family investors, primarily want tradability.
Investments & MarketsDistribution
Cash or securities returned to investors by a fund, typically after it sells an underlying investment. Distributions are the realised return of private markets investing and a key input to performance metrics such as DPI. Families must decide whether to spend, reserve, or recycle distributions into new commitments.
Private Markets & FundsDistribution Committee
A group named in a trust agreement with authority to decide whether, when, and how distributions are made to beneficiaries. Committees are common in directed trusts and family structures where distribution decisions benefit from family insight or independence from the trustee. Clear criteria and records protect both beneficiaries and decision-makers.
Trusts & Estate PlanningDNR (Do Not Resuscitate)
A medical order instructing healthcare providers not to perform CPR or similar life-saving interventions if a patient's heart or breathing stops. Unlike a living will, a DNR is a clinical order signed with a physician rather than a general legal document. It forms part of the broader set of healthcare directives families maintain for senior members.
Trusts & Estate PlanningDonor-Advised Fund (DAF)
A charitable giving account in which a donor contributes assets, receives an immediate tax deduction, and recommends grants to charities over time. DAFs offer the giving flexibility of a foundation with far less administration and cost. They have become the fastest-growing philanthropic vehicle among wealthy families.
Family Governance & SuccessionDPI and TVPI
Two core private equity ratios: DPI (distributions to paid-in capital) measures how much cash has actually been returned relative to capital invested, while TVPI (total value to paid-in capital) adds the remaining unrealised value. DPI shows realised performance; TVPI shows the total picture including paper gains. Together they reveal both how good a fund looks and how much of that value is already banked.
Private Markets & FundsDurable Power of Attorney (DPOA)
A document authorising a chosen agent to manage the principal's financial, legal, and property affairs, remaining effective even if the principal becomes incapacitated. It covers matters such as banking, contracts, and tax filings, but not healthcare decisions. A current DPOA is essential to keep a family's affairs running if the principal is suddenly unable to act.
Trusts & Estate PlanningDynasty Trust
A long-duration trust designed to hold and grow family wealth across many generations, in some jurisdictions in perpetuity. By keeping assets inside the trust, families can shield wealth from estate and transfer taxes at each generational handover as well as from creditors and divorce claims. Dynasty trusts are a cornerstone of multi-generational planning for UHNW families in jurisdictions that permit them.
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Earn-Out
A deal term under which part of a company's sale price is paid later, contingent on the business hitting agreed performance targets. Earn-outs bridge valuation gaps between buyer and seller but leave the selling family exposed to the business, and to disputes, after closing. They must be tracked as a conditional asset in the family's net worth until resolved.
Private Markets & FundsEmbedded CFO
A finance chief within the family's operating business who also looks after the family's private wealth, accounts, and administration alongside their corporate duties. This arrangement is common in business-owning families that have not yet established a formal family office. It works at modest complexity but strains as private assets, entities, and reporting needs multiply.
Family Office Models & RolesEmbedded Family Office
A family office that operates inside the family's operating business, sharing that company's finance staff, systems, and infrastructure rather than existing as a separate entity. It is a common starting point for business-owning families before wealth is formally separated from the company. As complexity grows, many families spin the function out into a standalone single family office.
Family Office Models & RolesEntity Management
The administration of the companies, trusts, partnerships, and foundations through which a family holds its wealth. It covers ownership records, directorships, filings, and the relationships between entities. Because UHNW structures routinely span multiple jurisdictions and generations, software that models complex ownership hierarchies has become indispensable to family offices.
Family Office Operations & TechnologyEscrow
Funds or shares from a transaction held by a neutral third party until agreed conditions are met, commonly to cover warranty claims after a business sale. Escrows typically release in stages over one to two years. For the selling family, escrowed amounts are real but restricted wealth that should appear in consolidated reporting with their release dates.
Private Markets & FundsESG Investing
An investment approach that incorporates environmental, social, and governance factors into analysis and portfolio construction. Unlike impact investing, ESG primarily uses these factors to manage risk and identify quality, rather than to pursue a specific mission. Many families apply ESG screens across their liquid portfolios while reserving impact allocations for targeted themes.
Investments & MarketsEstate Planning
The legal and financial arrangement of a person's assets to ensure they are transferred according to their wishes, with minimal tax friction and family conflict. Tools include wills, trusts, holding structures, and lifetime gifting strategies. For UHNW families, estate planning is a continuous discipline that must keep pace with changing laws, asset values, and family circumstances.
Trusts & Estate PlanningEstate Tax Return (Form 706)
The US federal filing that reports a deceased person's assets, liabilities, and their values to calculate estate tax owed. It is also used to elect portability of a deceased spouse's unused exemption. Preparing a 706 for a complex estate depends heavily on organised records of entities, valuations, and cost basis, work the family office does long before it is needed.
Tax & ComplianceExecutor
The person or institution appointed in a will to administer the deceased's estate: gathering assets, paying debts and taxes, and distributing what remains according to the will. For complex estates, executors work closely with the family office, which often holds the records that make administration possible. Choosing capable, impartial executors is a key estate planning decision.
Trusts & Estate PlanningExternal Advisers
The network of specialists outside the family office, such as lawyers, tax advisers, bankers, investment consultants, and insurance brokers, who support the family on specific matters. Even the largest offices rely on external expertise for jurisdiction-specific or technical questions. Coordinating these advisers, and giving them controlled access to accurate information, is a quiet but critical family office function.
Family Office Models & RolesF
Family Assembly
A periodic gathering of the extended family, often including spouses and younger generations, to share information about the family enterprise, celebrate shared history, and build cohesion. Unlike the family council, the assembly is inclusive rather than representative, and typically informational rather than decision-making. Regular assemblies are a proven tool for keeping large families connected to their shared wealth and values.
Family Governance & SuccessionFamily Bank
An internal family structure that lends to or invests in the ventures, education, or property purchases of individual family members on defined terms. It channels family capital toward member initiative while teaching accountability, since requests are evaluated like real financing proposals. A family bank keeps entrepreneurial energy inside the family enterprise without resorting to informal gifts.
Family Governance & SuccessionFamily Business Succession
The planned handover of leadership and ownership of a family-owned company to the next generation or to external management. It is among the most delicate transitions a family faces, mixing questions of competence, fairness, identity, and tax. Successful successions are prepared years in advance, with clear criteria for leadership roles and structures that separate ownership from management where needed.
Family Governance & SuccessionFamily Constitution
A written document, sometimes called a family charter, that records the family's values, mission, and rules for managing shared wealth. It typically covers decision rights, employment of family members, ownership transfers, and dispute resolution. While rarely legally binding, it serves as the moral and practical compass for family governance.
Family Governance & SuccessionFamily Council
A representative body of family members that meets regularly to discuss matters affecting the family's shared wealth, such as investment direction, philanthropy, and next-generation education. The council acts as the bridge between the wider family and the family office or business board. It gives family members a voice without involving everyone in day-to-day decisions.
Family Governance & SuccessionFamily Enterprise
The full collection of businesses, investments, real estate, philanthropic vehicles, and shared assets that a family owns and manages across generations. The term emphasises that family wealth is a system, not just a portfolio, encompassing operating companies alongside financial capital. Governing the family enterprise as a whole is the broader mission within which the family office operates.
Family Governance & SuccessionFamily Governance
The framework of structures, policies, and processes a family uses to make decisions about its shared wealth. Good governance defines who decides what, how conflicts are resolved, and how family members are educated and involved. It is widely regarded as the most important factor in preserving wealth beyond the third generation.
Family Governance & SuccessionFamily Office
A private organisation dedicated to managing the wealth and affairs of one or more affluent families. Beyond investment management, a family office typically handles reporting, accounting, tax coordination, estate planning, philanthropy, and lifestyle services. Its purpose is to preserve and grow family wealth across generations while keeping full control and confidentiality in the family's hands.
Family Office Models & RolesFamily Office Portal
A secure online interface through which principals, family members, and advisers view their wealth: net worth, performance, documents, and reports, on demand from any device. Portals replace the quarterly PDF with continuous, self-service access, with permissions controlling exactly who sees what. For the next generation especially, a portal is the expected way to interact with family wealth.
Family Office Operations & TechnologyFamily Office Services
The full menu of services a family office may provide, spanning investment management, consolidated reporting, accounting, tax coordination, estate administration, philanthropy, risk management, and lifestyle support. No two offices offer the same mix; each family decides what to keep in-house, what to outsource, and what to skip. Defining the service scope is the first step in designing or evaluating any family office.
Family Office Models & RolesFamily Wealth Education
The structured preparation of family members, especially the next generation, to understand, manage, and take responsibility for wealth. Programmes range from financial literacy basics to shadowing the investment committee, running philanthropic budgets, or participating in a family bank. Families that invest in education consistently outperform in preserving both wealth and family unity.
Family Governance & SuccessionFamily Wealth Protection
The combination of legal structures, insurance, security measures, and governance practices that shield family wealth from external and internal threats. External risks include litigation, creditors, fraud, cybercrime, and political instability; internal risks include divorce, disputes, and mismanagement. Protection strategies work best when designed before problems arise, not in response to them.
Family Governance & SuccessionFBAR (Foreign Bank Account Reporting)
A US filing, FinCEN Form 114, required of US persons whose foreign financial accounts exceed US$10,000 in aggregate value at any point in the year. Penalties for non-filing are severe, even when no tax is due. For globally banked families with US members, tracking every foreign account across entities and custodians is a compliance necessity that consolidated record-keeping makes manageable.
Tax & ComplianceFiduciary
A person or institution legally bound to act solely in the best interests of another party, such as a trustee acting for beneficiaries or an adviser acting for a client. Fiduciary duty is the highest standard of care in financial services, prohibiting self-dealing and undisclosed conflicts of interest. Families benefit from knowing which of their advisers act as fiduciaries and which are held to lower standards of conduct.
Trusts & Estate PlanningFinance Manager
The staff member in a family office responsible for day-to-day financial operations, including bookkeeping, payments, reconciliations, cash management, and preparing reports for the principal. In smaller offices the finance manager often is the office, covering everything from bank liaison to entity administration. Modern software dramatically expands what a single finance manager can handle.
Family Office Models & RolesFirst-Generation Wealth Creator (Gen 1)
The family member who originally built the fortune, typically through founding and growing a business or a successful career at the top of a profession. Gen 1 principals tend to stay closely involved in decisions, value control and discretion, and often run their wealth with a lean team. Their priorities usually centre on structuring the wealth properly for the first time and preparing the family for what comes next.
Family Governance & SuccessionFixed Income
Investments that pay a defined stream of interest, primarily government and corporate bonds. Fixed income provides portfolio stability, predictable cash flow, and a counterweight to equity risk, making it a core allocation in most family portfolios. Family offices use it to match known liabilities such as tax bills, distributions, and expected capital calls.
Investments & MarketsG
General Partner (GP)
The manager of a private markets fund, responsible for sourcing investments, making decisions, and running the fund's operations. The GP typically earns a management fee plus carried interest, and usually invests its own capital alongside investors to align incentives. Assessing the quality, track record, and alignment of the GP is the heart of fund due diligence.
Private Markets & FundsGeneration-Skipping Transfer Tax (GST)
A US federal tax on wealth transfers to recipients two or more generations below the donor, such as grandchildren, or to unrelated persons more than 37.5 years younger. Levied at a flat 40 percent on top of any estate or gift tax, it prevents families from skipping a generation of taxation. Careful allocation of the GST exemption is what makes multi-generational structures like dynasty trusts work.
Tax & ComplianceGenerational Wealth Transfer
The passing of assets, ownership stakes, and financial responsibility from one generation of a family to the next. Done well, it combines legal structuring, tax planning, and deliberate preparation of heirs over many years. Done poorly, it is the point at which most family fortunes fragment, which is why family offices treat it as a core discipline rather than a one-time event.
Family Governance & SuccessionGift Tax
A US federal tax on transferring value to another person without receiving full value in return, designed to stop wealth passing tax-free during life. Gifts up to the annual exclusion, US$19,000 per recipient as of 2026, are tax-free, and larger gifts draw down the donor's lifetime exemption before any tax is owed. Systematic use of exclusions and exemptions is a cornerstone of US wealth transfer planning.
Tax & ComplianceGift Tax Return (Form 709)
The US federal return used to report gifts that exceed the annual exclusion or otherwise require disclosure, filed by the donor. The return tracks how much of the donor's lifetime exemption has been used and starts the statute of limitations if valuations are adequately disclosed. Accurate gift records across decades are essential for eventual estate tax calculations.
Tax & ComplianceGrantor (Settlor)
The individual or entity that creates a trust and transfers assets into it, also known as the settlor, trustmaker, or trustor depending on jurisdiction. The grantor defines the trust's terms: who benefits, who serves as trustee, and how assets may be used. In many UHNW structures, the founding generation acts as grantor of the trusts that will carry wealth forward.
Trusts & Estate PlanningGrantor Retained Annuity Trust (GRAT)
An irrevocable trust into which the grantor transfers assets while retaining fixed annuity payments for a term of years, with any growth above an IRS-set rate passing to beneficiaries free of gift tax. GRATs are a favoured technique for shifting the upside of high-growth assets, such as pre-IPO stock, to the next generation at minimal tax cost. If the assets underperform, the grantor simply gets the assets back through the annuity.
Trusts & Estate PlanningGrantor Trust
A trust whose income is taxed to the grantor personally rather than to the trust or its beneficiaries, under US grantor trust rules. This treatment applies to all revocable trusts and to certain irrevocable trusts designed intentionally to achieve it. Paying the trust's income tax personally lets the grantor effectively make additional tax-free transfers, as trust assets grow undiminished.
Trusts & Estate PlanningGreat Wealth Transfer
The unprecedented movement of wealth, estimated at over US$80 trillion globally, passing from baby boomers to younger generations over the coming decades. For family offices, it raises urgent questions of succession, governance, and heir readiness. It is also accelerating demand for modern reporting tools, as inheritors expect digital, on-demand visibility into family wealth.
Family Governance & SuccessionGST Exemption
The amount each individual can transfer to grandchildren or later generations free of generation-skipping transfer tax, aligned with the lifetime exemption at US$15 million per person as of 2026. Allocating GST exemption to a dynasty trust at funding can shelter that trust's growth from transfer tax for generations. Tracking exemption allocation across gifts and trusts is a critical, and easily mishandled, planning task.
Tax & ComplianceH
Healthcare Power of Attorney
A document designating someone to make medical decisions on a person's behalf if they are unable to decide for themselves. It complements the living will, covering situations the written directive does not anticipate. Family offices often keep these documents, current and accessible, as part of the family's emergency file.
Trusts & Estate PlanningHedge Fund
A privately offered investment fund that pursues flexible strategies, including short selling, leverage, and derivatives, aiming for returns that do not simply track markets. Hedge funds sit within the alternatives allocation of many family portfolios, valued for diversification and downside management. They charge management and performance fees and typically restrict withdrawals through lock-ups and notice periods.
Private Markets & FundsHigh-Net-Worth Individual (HNWI)
A person with investable assets of at least US$1 million, excluding their primary residence. HNWIs are the classic clientele of private banks and wealth managers. The category is often subdivided, with 'very-high-net-worth' commonly describing those with US$5 million to US$30 million in investable assets.
Family Office Models & RolesHIPAA Release
A form authorising healthcare providers to share a patient's medical information with named third parties, under the US health-privacy law HIPAA. Without releases on file, even close family members and appointed agents can be denied information in a medical emergency. They are a small but critical component of a complete incapacity plan.
Trusts & Estate PlanningHoldback
A portion of a transaction's purchase price that the buyer retains, rather than placing with a third party, until conditions such as warranty periods or milestone deliveries are satisfied. Holdbacks serve the same protective purpose as escrows but leave the funds with the buyer. Sellers track them as receivables with defined release terms in their post-transaction reporting.
Private Markets & FundsHolding Company
A company created to own shares in other companies, investments, or assets rather than to trade in its own right. UHNW families use holding companies to consolidate ownership, centralise governance, manage tax exposure, and simplify succession. A family's wealth is often held through layers of holding companies, trusts, and partnerships that reporting systems must map accurately.
Trusts & Estate PlanningHurdle Rate
The minimum return, commonly 8 percent per year, that a fund must deliver to investors before the manager can collect carried interest. The hurdle protects investors from paying performance fees on mediocre results. Understanding how the hurdle and any catch-up provisions work is essential to reading a fund's economics.
Private Markets & FundsI
Illiquid Assets
Assets that cannot be quickly sold at fair value, including private equity stakes, real estate, direct holdings in companies, and collectibles. Illiquid assets often make up the majority of UHNW wealth and carry return premiums precisely because capital is locked up. They also lack daily pricing and standard statements, which is why tracking them accurately is a defining challenge of family office reporting.
Investments & MarketsImpact Investing
Investing with the intention of generating measurable social or environmental benefit alongside financial return. Family offices are prominent impact investors, as families can align capital with values without answering to outside shareholders. Interest is especially strong among next-generation family members, who often lead the family's impact strategy.
Investments & MarketsInitial Public Offering (IPO)
The first sale of a company's shares to the public, listing them on a stock exchange. For founding families, an IPO is a defining liquidity event that converts concentrated private ownership into tradeable, and visible, public wealth. It typically triggers lock-up periods, diversification planning, and often the founding of a family office.
Investments & MarketsInsurance Trust (ILIT)
An irrevocable trust created to own a life insurance policy on the grantor, keeping the death benefit outside the grantor's taxable estate. Proceeds pass to beneficiaries free of estate tax and can provide liquidity to pay estate taxes or equalise inheritances without forced asset sales. ILITs are a standard building block in UHNW estate plans, particularly where wealth is concentrated in illiquid holdings.
Trusts & Estate PlanningInternal Rate of Return (IRR)
The annualised return that accounts for the size and timing of all cash flows into and out of an investment. IRR is the standard performance measure for private equity and other investments with irregular cash flows. Because principals control when money moves, IRR reflects the investor's actual experience, unlike time-weighted measures.
Private Markets & FundsInvestment Committee
A governance body responsible for overseeing a family's investment strategy, approving significant decisions, and monitoring performance against the investment policy statement. Committees typically combine family members with independent experts. Regular, data-rich reporting is essential for committees to exercise effective oversight.
Investments & MarketsInvestment Policy Statement (IPS)
A formal document that defines a family's investment objectives, risk tolerance, time horizon, asset allocation targets, and constraints. The IPS guides every investment decision and provides the benchmark against which performance and discipline are judged. It is the anchor document for investment committees and outsourced managers alike.
Investments & MarketsIrrevocable Trust
A trust that cannot be unwound by the grantor once assets are transferred in, permanently removing those assets from the grantor's ownership. That permanence is what delivers the benefits: estate tax reduction, creditor protection, and multi-generational control. Most sophisticated wealth transfer structures, from dynasty trusts to GRATs and insurance trusts, are irrevocable.
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Lifestyle Management
The non-financial services a family office provides to family members, including travel arrangements, property and staff management, aviation and yacht administration, security, and bill payment. Sometimes called concierge services, they free the family's time and centralise personal administration. Costs and assets involved are increasingly tracked in the same systems as financial wealth.
Family Office Models & RolesLifetime Exemption
The total amount an individual can transfer during life and at death free of US federal estate and gift tax, set at US$15 million per person (US$30 million per couple) from 2026 and indexed for inflation. Transfers above the exemption are taxed at 40 percent. The exemption is portable between spouses and is the central planning number in US estate strategy.
Tax & ComplianceLimited Partner (LP)
An investor in a private markets fund who provides capital but plays no role in management and whose liability is limited to the amount committed. Family offices are among the most active LPs globally, valued by managers for their patient, long-term capital. LPs receive periodic capital calls, distributions, and quarterly reports that feed into the family's consolidated reporting.
Private Markets & FundsLiquid Wealth Management
The management of a family's readily tradeable assets, such as listed equities, bonds, funds, and cash held with banks and custodians. Liquid wealth funds lifestyle spending, capital calls, and new opportunities, and is where day-to-day portfolio decisions happen. Family offices typically monitor liquid wealth daily through custodial feeds while reviewing illiquid holdings on a slower cycle.
Investments & MarketsLiquidity
The ease with which an asset can be converted into cash without significant loss of value. Listed equities and bonds are liquid; private equity, real estate, and collectibles are illiquid. Family offices manage liquidity carefully to fund capital calls, distributions to family members, taxes, and lifestyle spending without forced selling.
Investments & MarketsLiquidity Event
A transaction, such as the sale of a family business, an IPO, or a large dividend, that converts illiquid ownership into investable cash. Liquidity events are often the moment a family office is founded, as families suddenly face the task of managing substantial financial capital. They trigger major decisions on structuring, allocation, and governance.
Investments & MarketsLiving Will
An advance directive stating what medical treatment a person does or does not want if they cannot communicate their wishes, particularly around life-sustaining measures. It guides both physicians and the healthcare agent, reducing the burden of impossible decisions on family members. Alongside powers of attorney, it belongs in every principal's incapacity plan.
Trusts & Estate PlanningLock-Up
A period during which an investor cannot withdraw capital from a fund, standard in hedge funds and inherent in private equity's ten-plus-year structure. Lock-ups let managers pursue strategies without forced selling but concentrate liquidity risk with the investor. Family offices map lock-ups across all funds to understand how much of the portfolio is truly accessible at any time.
Private Markets & FundsLook-Through Reporting
Reporting that pierces layers of funds, holding companies, and trusts to show the family's true underlying exposures, for example, its real total exposure to a single stock, sector, or currency across all structures. Without look-through, concentrations hide inside entities and fund wrappers. It is one of the most valuable and technically demanding capabilities in wealth reporting.
Family Office Operations & TechnologyM
Management Fee
The annual fee a fund manager charges on committed or invested capital, typically 1.5 to 2 percent in private equity, to cover salaries, operations, and deal sourcing. Management fees are charged regardless of performance, which is why investors scrutinise them alongside carried interest. Over a fund's life, fees meaningfully reduce net returns, a key argument for direct investing and co-investments.
Private Markets & FundsMark-to-Market Valuation
The practice of valuing assets at their current market price rather than historical cost. Liquid securities are marked daily, while private assets rely on periodic appraisals or manager-reported values. Consistent valuation policy across liquid and illiquid holdings is essential for a net worth statement the family can trust.
Investments & MarketsMergers and Acquisitions (M&A)
The buying, selling, and combining of companies, whether a family sells its operating business, acquires a competitor, or exits a direct investment. M&A transactions are the largest single events in most families' financial lives, reshaping wealth, liquidity, and structure overnight. Family offices coordinate the advisers, structuring, and post-transaction investment of proceeds.
Private Markets & FundsMulti-Family Office (MFO)
A firm that provides family office services to several unrelated families, allowing them to share the cost of investment professionals, reporting infrastructure, and administrative staff. MFOs make institutional-quality wealth management accessible to families who do not want to build a standalone operation. Clients trade some exclusivity for lower cost and access to a broader team.
Family Office Models & RolesMultiple on Invested Capital (MOIC)
A private markets metric that divides total value, both realised and unrealised, by the capital invested. A MOIC of 2.0x means the investment has doubled the money put in, regardless of how long that took. It is usually read alongside IRR, which adds the time dimension MOIC ignores.
Private Markets & FundsN
NAV Financing
A loan secured against the net asset value of an investment portfolio, most often a private equity portfolio, used to raise liquidity without selling the underlying holdings. Families use NAV financing to fund new commitments, distributions, or opportunities while keeping long-term positions intact. It has grown rapidly as private markets allocations have become larger and less liquid.
Private Markets & FundsNet Asset Value (NAV)
The value of an entity's or fund's assets minus its liabilities, representing what the holding is worth at a point in time. In private markets, NAVs are reported quarterly by fund managers and arrive with a lag. Family office reporting combines custodial market values with reported NAVs to build a complete picture of wealth.
Private Markets & FundsNet Worth Statement
A consolidated statement of everything a family owns and owes, spanning bankable assets, private investments, real estate, and liabilities, across all entities and family members. It is the family office equivalent of a balance sheet and the document principals most often ask for. Producing it on demand, rather than weeks after quarter-end, is a hallmark of a well-run office.
Family Office Operations & TechnologyNext Generation (NextGen)
The children and grandchildren of the wealth-creating generation, who will eventually inherit and steward the family's assets. Preparing the next generation through financial education, governance participation, and gradual responsibility is a top priority for family offices. NextGen family members often push for digital reporting, sustainable investing, and greater transparency.
Family Governance & SuccessionNext-Generation Inheritor (Gen 2)
A family member who inherits rather than creates the family's wealth and must grow into the role of steward. Gen 2 principals typically face different challenges from their parents: managing a diversified portfolio rather than an operating business, coordinating siblings and cousins, and professionalising governance. As a group, they push family offices toward digital tools, transparency, and values-aligned investing.
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P
Philanthropy
The strategic giving of family wealth to charitable causes, often organised through foundations, donor-advised funds, or direct grants. For many families, philanthropy expresses shared values, unites generations, and provides a training ground for next-generation leadership. Family offices commonly administer the giving vehicles and report on grant-making alongside investments.
Family Governance & SuccessionPower of Appointment
A right granted under a trust or will allowing its holder to direct where certain trust property goes, within limits set by the document. Powers of appointment build flexibility into long-lived structures, letting future generations redirect wealth as circumstances change. Some trusts appoint a power-of-appointment committee to exercise this right collectively.
Trusts & Estate PlanningPrincipal
The individual or couple whose wealth the family office exists to manage, usually the founder of the family fortune or the current head of the family. Principals set the overall objectives, risk appetite, and values that guide the office. Clear reporting to the principal, on their terms and timetable, is one of the core functions of any family office.
Family Office Models & RolesPrivate Asset Tracking
The systematic monitoring of non-bankable holdings, including private equity funds, direct investments, real estate, and loans, covering commitments, capital calls, distributions, valuations, and documents. Because these assets generate no custodial feed, they historically lived in spreadsheets and inboxes. Dedicated tracking tools bring them into the same consolidated view as liquid assets, completing the family's picture of its wealth.
Family Office Operations & TechnologyPrivate Credit
Lending to companies outside public bond markets and traditional banks, spanning direct lending, mezzanine finance, and distressed debt. Private credit has grown rapidly as an asset class, offering yield premiums over public fixed income in exchange for illiquidity. It has become a staple allocation in many family office portfolios.
Private Markets & FundsPrivate Equity
Investment in companies that are not publicly traded, typically through funds that acquire, improve, and eventually sell businesses. Private equity offers strong long-term return potential in exchange for illiquidity and long holding periods. For family offices, tracking commitments, capital calls, distributions, and valuations across many funds is a significant administrative undertaking.
Private Markets & FundsPrivate Foundation
A charitable entity established and funded by a family to make grants, pursue programmes, and carry the family's name and values forward. Foundations offer maximum control over giving but bring governance, minimum-distribution, and reporting obligations. They frequently sit within the family's broader entity structure and are administered by the family office.
Family Governance & SuccessionPrivate Trust Company (PTC)
A trust company owned and controlled by a single family to act as trustee of its own trusts, instead of appointing an external institution. A PTC gives the family greater control, continuity, and privacy in trustee decisions while allowing family members and trusted advisers to sit on its board. It is a common feature of large, sophisticated family wealth structures.
Trusts & Estate PlanningPublic Markets
Exchanges and regulated venues where securities such as listed stocks and bonds are bought and sold, with continuous pricing and deep liquidity. Public markets form the liquid core of most family portfolios and the benchmark against which private investments are judged. Positions are visible on custodial statements, making them the easiest part of family wealth to aggregate and report.
Investments & MarketsR
Real Assets
Physical assets with intrinsic value, including real estate, infrastructure, farmland, timberland, and commodities. Real assets provide income, inflation protection, and diversification, and many families hold substantial legacy real estate. Their infrequent valuations and direct ownership structures make them a classic example of assets that live outside custodial statements.
Investments & MarketsRebalancing
The periodic adjustment of a portfolio back to its target asset allocation after market movements cause it to drift. Disciplined rebalancing enforces buying low and selling high and keeps risk aligned with the family's policy. Accurate rebalancing across a multi-custodian, multi-entity portfolio depends on a reliable consolidated view of holdings.
Investments & MarketsRevocable Trust
A trust the grantor can amend or dissolve at any time during their lifetime, commonly used to avoid probate and direct how assets pass at death. Because the grantor retains full control, revocable trusts offer no estate tax savings or asset protection. Their value lies in privacy, continuity, and smooth administration when the grantor dies or loses capacity.
Trusts & Estate PlanningRisk Management
The systematic identification, assessment, and mitigation of threats to family wealth and wellbeing, spanning market and liquidity risk, concentration, cyber security, personal safety, reputation, and operational failures. Family offices increasingly formalise risk management with registers, insurance programmes, and controls. Consolidated visibility across all assets and entities is the prerequisite for understanding what is actually at risk.
Investments & MarketsS
Secondaries
The purchase or sale of existing interests in private funds or portfolios, rather than committing to a fund at launch. Secondaries give sellers liquidity from otherwise locked-up positions and offer buyers discounted entry, shorter duration, and visibility into existing holdings. The secondary market has become an important portfolio management tool for family offices with large private markets books.
Private Markets & FundsSelf-Run Family Office
An arrangement in which the principal personally manages their wealth with minimal or no dedicated staff, supported by external advisers and technology. Many first-generation wealth creators prefer this hands-on model, valuing control and low overhead. Modern platforms make it viable at significant scale by automating the aggregation, reporting, and record-keeping that once required a full team.
Family Office Models & RolesSide Letter
A private agreement between a fund and an individual investor granting terms beyond the standard fund documents, such as fee discounts, co-investment rights, enhanced reporting, or transfer permissions. Large or early investors, including family offices, routinely negotiate side letters. Tracking the specific rights held in each fund is part of disciplined private markets administration.
Private Markets & FundsSingle Family Office (SFO)
A family office that serves exactly one family, with staff, systems, and infrastructure dedicated solely to that family's wealth. SFOs offer maximum privacy and customisation but carry the full cost of operations, which is why they are usually established by families with several hundred million or more in assets. Many SFOs today rely on specialised software to keep lean teams efficient.
Family Office Models & RolesSingle Source of Truth
One system holding the authoritative, reconciled record of all family assets, transactions, entities, and documents, which every report and decision draws from. It eliminates the classic family office problem of conflicting numbers from different spreadsheets, banks, and advisers. Establishing a single source of truth is the central promise of modern family office software.
Family Office Operations & TechnologySPAC (Special Purpose Acquisition Company)
A shell company that raises capital through its own IPO with the sole purpose of merging with a private company and taking it public. SPACs offer private companies a faster, negotiated alternative to a traditional IPO. Family offices have participated as SPAC sponsors, investors, and as owners of businesses acquired by SPACs.
Investments & MarketsSPAC Merger (De-SPAC)
The transaction in which a SPAC combines with its target private company, which thereby becomes publicly listed. Shareholders of the target, often including founders and family investors, receive listed shares and sometimes cash. The de-SPAC converts private stakes into public securities that then flow into custodial accounts and consolidated reporting.
Investments & MarketsSpecial Purpose Trust
A trust established for a defined non-charitable purpose rather than for named beneficiaries in the usual sense, such as providing for a family member with special needs, caring for pets, or maintaining a property, collection, or family archive. These trusts ensure that specific responsibilities are funded and managed beyond any individual's lifetime. They often sit alongside the family's main wealth-transfer structures.
Trusts & Estate PlanningSpecial Purpose Vehicle (SPV)
A legal entity created for a single, defined purpose, such as holding one property, making one direct investment, or pooling family capital in a specific deal. SPVs ring-fence risk and clarify ownership among participating family members or co-investors. Active families may hold dozens of SPVs, making entity-level tracking a core reporting requirement.
Private Markets & FundsSuccession Planning
The deliberate process of preparing for the transfer of leadership, ownership, and wealth to the next generation. In a family office context, it covers who will lead the office, how assets and entities will pass, and how heirs are prepared for their responsibilities. Families that start early and document their plans dramatically reduce the risk of wealth destruction during transitions.
Family Governance & SuccessionSuccessor Trustee
The person or institution designated to take over administration of a trust when the current trustee dies, resigns, retires, or becomes incapacitated. A formal designation document names or updates the successor, and keeping it current is essential to avoid gaps in trust administration. Succession of trustees deserves the same planning attention as succession of wealth itself.
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Tax Planning
The legal structuring of a family's affairs, through entity choice, residency, timing, and jurisdiction, to minimise tax liabilities across income, capital gains, wealth, and inheritance taxes. For UHNW families with assets and members in multiple countries, tax planning is a continuous, coordinated exercise rather than an annual event. It sits at the intersection of investment strategy, wealth structuring, and estate planning.
Tax & ComplianceTestamentary Power of Appointment
A power of appointment that can only be exercised at the holder's death, typically through their will or a codicil to it. It lets each generation fine-tune how trust assets pass to the next, without giving anyone the ability to redirect wealth during life. Testamentary powers are a common tool for keeping dynasty structures adaptable across decades.
Trusts & Estate PlanningTime-Weighted Return (TWR)
A performance measure that eliminates the effect of cash flows in and out of a portfolio, isolating the pure investment return. TWR is the standard for judging investment managers, since they do not control when clients add or withdraw money. Family offices typically monitor both TWR, to evaluate managers, and IRR, to understand the family's own outcome.
Investments & MarketsTrust
A legal arrangement in which one party (the settlor) transfers assets to another (the trustee) to hold and manage for the benefit of designated beneficiaries. Trusts are foundational tools in UHNW wealth planning, used for succession, asset protection, tax efficiency, and privacy. Family offices frequently administer multiple trusts across several jurisdictions.
Trusts & Estate PlanningTrust Protector
An independent role, common in directed and modern trusts, with defined powers to supervise the trustee, such as replacing trustees, amending administrative terms, or vetoing certain decisions. The protector adds a layer of oversight and adaptability to trusts designed to last generations. Families often appoint a trusted adviser or committee to the role.
Trusts & Estate PlanningTrustee
The individual or institution legally responsible for holding and managing trust assets in the best interests of the beneficiaries. Trustees owe fiduciary duties of loyalty and care, and their decisions are governed by the trust deed. Families often combine professional trustees with trusted advisers or family members to balance expertise and family insight.
Trusts & Estate PlanningU
Ultimate Beneficial Owner (UBO)
The natural person who ultimately owns or controls an entity, looking through all intermediate companies, trusts, and nominees. Regulators worldwide require UBO identification and, in many jurisdictions, registration. For families with layered structures, maintaining an accurate, current map of beneficial ownership is both a compliance duty and a governance necessity.
Tax & ComplianceUltra-High-Net-Worth Individual (UHNWI)
A person with investable assets of US$30 million or more, the threshold most widely used across the wealth management industry. UHNWIs typically hold complex, multi-jurisdictional portfolios spanning operating businesses, private investments, and real estate. At this level of wealth, families often establish a family office or engage a multi-family office to coordinate their affairs.
Family Office Models & RolesUnfunded Commitment
The portion of a capital commitment that a fund has not yet called, and which the investor must stand ready to pay on short notice. Across dozens of funds, unfunded commitments add up to a substantial contingent liability that shapes how much cash and liquid assets a family must hold. Monitoring total unfunded exposure in real time is a core private markets reporting requirement.
Private Markets & FundsV
Venture Capital
A form of private equity that funds early-stage companies with high growth potential in exchange for equity stakes. Returns follow a power law, where a few winners are expected to offset many losses. Family offices participate through funds or direct deals, often leveraging the family's entrepreneurial expertise and networks.
Private Markets & FundsVintage Year
The year in which a private markets fund makes its first investment or holds its final close, used to group funds for performance comparison. Returns vary enormously by vintage, since funds that invested into downturns often outperform. Families diversify commitments across vintage years to smooth the effect of market cycles on their private portfolio.
Private Markets & FundsVirtual Family Office (VFO)
A lean family office model in which a small core team, sometimes just the principal and one adviser, coordinates a network of external specialists such as lawyers, accountants, and investment managers. Technology plays a central role, replacing in-house staff with cloud-based platforms for data aggregation, reporting, and document management. VFOs are increasingly popular with first-generation wealth creators.
Family Office Models & RolesW
Wealth Management CRM
A relationship management system adapted to wealth contexts, recording the people, entities, advisers, meetings, and documents connected to a family's affairs. In multi-family offices it manages client relationships; in single family offices it tracks the web of bankers, lawyers, and managers around the family. Linking relationship data to portfolio data keeps institutional memory inside the office rather than in individuals' heads.
Family Office Operations & TechnologyWealth Mapping
The exercise of documenting everything a family owns, where it is held, through which entities, and who controls and benefits from it. A complete wealth map covers bankable assets, private investments, real estate, collectibles, liabilities, and the legal structures connecting them. It is the foundation for consolidated reporting, succession planning, and crisis readiness, and its absence is often only discovered when a principal dies unexpectedly.
Family Office Operations & TechnologyWealth Preservation
The discipline of protecting family wealth against erosion from taxes, inflation, litigation, fraud, poor governance, and family conflict. Where wealth creation is about maximising returns, preservation prioritises capital protection, diversification, and sound structures. It reflects the reality that most family fortunes are lost within three generations, usually to preventable causes rather than bad markets.
Family Governance & SuccessionWealth Structuring
The design of the legal and tax architecture through which a family holds its assets, encompassing trusts, holding companies, foundations, insurance solutions, and jurisdictional choices. Good structuring balances tax efficiency, asset protection, succession goals, and regulatory compliance. It determines the entity framework that a family office must then administer and report on.
Trusts & Estate PlanningWealthTech
The category of technology built for wealth management, spanning portfolio management systems, data aggregation platforms, reporting tools, and client portals. WealthTech has transformed family offices in particular, replacing spreadsheet-driven operations with automated, auditable systems. The best platforms are purpose-built for the complexity of UHNW wealth: multiple entities, custodians, currencies, and illiquid assets.
Family Office Operations & TechnologyWill
A legal document directing how a person's assets are distributed at death and, where relevant, who will care for minor children. For UHNW individuals, the will works alongside trusts and entity structures, often functioning as a backstop that pours remaining assets into trusts. Dying without a valid will leaves distribution to statutory default rules, an outcome no wealthy family intends.
Trusts & Estate Planning